Region

Africa & Middle East

All Eyes On Mauritius

Emerging outsourcing location: Island paradise in driving seat to take advantage of African BPO explosion

By Martin Conboy

Mauritius is situated off the African continent east of Madagascar with a population of 1.3 million. The population is an unconventional fusion of Arabic, Indian, Creole, Singhalese, French, English and European all mixed in together to make a fabulous amalgamation of exotic humanity – a miniature universe, a global melting pot. Be that as it may, they have found the magic formula of how to get along to go along and part of its charm is the peaceful nature of the people.

Although known to Arab and Malay sailors as early as the 10th century, Mauritius was first explored by the Portuguese in the 16th century and subsequently settled by the Dutch – who named it in honour of Prince Maurits van Nassau – in the 17th century. The French then assumed control in 1715, developing the island into an important naval base overseeing Indian Ocean trade, and establishing a plantation economy of sugar cane.

The British came and captured the island from the French in 1810 during the Napoleonic Wars, leaving the British in complete control of the Indian Ocean. The Indian Ocean was a vital part of the chain of trade links that connected the British Empire. In fact, Matthew Flinders who went on to be the first man to circumnavigate Australia was a prisoner of the French at this time. The defeat marked the end of French hopes of seriously disrupting British trade with India.

With strategic bases placed along their trade routes, British convoys were assured a greater degree of safety that the Royal Navy provided with the infrastructure to operate worldwide. Analogous to this, history shows us that Mauritius has always been an important strategically located island and as you will read later, so it is again in our new hyper connected world.

Post Independence

Independence from the UK was attained in 1968. A secure stable democracy with regular free elections and a positive human rights record, the country has attracted considerable foreign investment and has earned one of Africa’s highest per capita incomes.

Since its independence, Mauritius has developed from a low-income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourist sectors. For most of the period, annual growth has been in the order of 5% to 6%.

The government’s development strategy centres on creating vertical and horizontal clusters of development in these sectors. Mauritius has attracted more than 32,000 offshore entities, many aimed at commerce in India, South Africa, and China. Investment in the banking sector alone has reached over US$1 billion. The economy is gradually shifting from light manufacturing and agriculture towards a services based economy. The services sector now represents over 70% of GDP.

The country now promotes its “five pillars” – tourism, agriculture, off shore financial services, manufacturing and ICT-BPO.

Mauritius’ sound economic policies and prudent banking practices helped to mitigate negative effects from the global financial crisis in 2008-09. In 2010-11, its GDP grew more than 4% per year and the country continues to expand its trade and investment outreach around the globe.

ICT To The Fore

The official Government Statistics released in August indicates that the ICT sector has well established itself as the third pillar of the economy contributing to 6.7% of the Gross Domestic Product, coming just after the tourism sector.

Further, according to official estimates, GDP contribution of the ICT sector will hit the 7% bar by December 2012 – which would mean that, by then, only 1% gap will exist with respect to the tourism sector.

Mauritius is well poised to take advantage of African BPO growth, says Tassarajen Pillay Chedumbrum, Minister of Information and Communication Technology. “It is an undeniable fact that the continent of Africa has known unprecedented growth during the past years and is now home to tantalising economic and commercial prospects,” Pillay said.

“Indeed, in stark comparison with other regions of the world and despite springing off from a relatively low base, sub-Saharan Africa ushered a notable annual average growth rate of 5.8% over the decade ending 2011 as compared to 2.8% in the preceding ten-year period, leading to GDP measured in US dollars to expand by more than three and a half times.”

He added that the ready availability of broadband connectivity coupled with reduction of telecommunications costs in Africa would be a game changer for the global ICT Industry landscape – estimating a global ICT/BPO market up to US$200 billion.

“It is therefore imperative that African countries seize this opportunity and leverage on Mauritius’ cultural, language and historical affinities to not only set up strong ICT/BPO Sector in individual African countries but also complement each other’s strengths to tap into the vast global ICT BPO market.”

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Bold StrategIes

Over the last five years, Mauritius has embraced some bold economic reforms that have positioned the country among the most open, competitive and lowest tax economies in the world. Capitalising on its strategic location and relying on its sound domestic economic base, Mauritius is increasingly being viewed as a global business platform for many international players in the ICT/BPO industry.  The outsourcing industry has witnessed significant transformation over the last five years. Starting with basic data entry tasks, the industry graduated to a high proportion of voice-based services and a range of back-office processing activities. The last three-four years have seen the scope of services expanding to include increasingly KPO complex processes involving rule-based decision making and even research services requiring informed individual judgment.

Today, the sector faces a unique opportunity to enhance its role as a high value added service provider and capitalise on the expanding BPO landscape especially in Africa. The country is gradually being recognised as a centre of excellence in the areas of finance, accounting and IT services. Mauritius has developed technology and free trade zones like the Ebene Cyber city, which houses over 50 IT/BPO companies.

A Good ICT Backbone

Mauritius has a proven track record of political stability and has developed a pro-business environment. Outsourcing of services has been possible only because of the tremendous advancements in telecommunication technology over the years. Mauritius has a strong IT infrastructure and support. The island has a well-developed digital network infrastructure and high bandwidth capabilities. This technological support forms the backbone of this booming outsourcing industry.

Moreover, two parameters were important in placing Mauritius on the outsourcing world map – namely cost-competitiveness and quality of delivery. These key success factors coupled with a conductive business climate gives Mauritius its competitive edge on the global scene and have encouraged a number of multinationals corporations among which Orange, Accenture, Infosys, HTMT, Ceridian, Huawei and CSS Corp to utilise the island nation as part of their global delivery model.

Moreover, the country has also broadcast its Data Protection Act and is working with the European Union for the “Adequacy Finding” – ensuring the safe transfer of sensitive and personal data.

Mounir Qalam, General Manager, CSL, a major BPO vendor in Mauritius and part of Mauritius & France Telcom said: “Mauritius has already embraced the opportunity presented by ICT and offshoring, and is currently handling BPO projects from around the world and specifically the US and France.”

The BPO industry in Mauritius is poised for future development and it is exquisitely positioned on the edge of Africa as it geographically opens up to BPO. While India and Philippines have well articulated attributes and are recognised as mature BPO centres, Mauritius can be used as a complementary destination targeting both English and French speaking markets.

This bilingual capability of switching between French and English language with ease is clearly impressive.

CSL’s Qalam added: “Mauritius is well situated, politically stable and has a very steady economy. The population is bilingual with a strong service culture. This is a function of Mauritius being a well known first-class tourism destination and superior customer service is absolute in our DNA.”

This is supported by Accenture, who has been operating in Mauritius since 2002 and now has over 1,100 employees.

Its country CEO Yves Bernaert commented: “Mauritius is a destination of choice for French-speaking, English-speaking and other European-based clients of Accenture because of the availability of multilingual workforce at competitive rates, modern and reliable infrastructure and the country’s political and social stability.”

Indeed, the ICT/BPO industry has allowed Mauritius to pull itself into the mainstream of its economic development. Today the country is recognised as one of the 30 top outsourcing locations as listed by Gartner in its “Globally Sourced Activities report 2010” and as one of the most cost competitive locations for the delivery of offshore services by Everest Consulting.

Essentially this sector has grown from a nascent industry into one of the country’s leading sources of employment and major contributor to GDP. 

Martin Conboy is the publisher of The Sauce – a partner publication of the Outsourcing magazine.

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